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AT&T TV Subs Decline in Q4, Despite Strong DirecTV U.S. Gains

AT&T’s DirecTV unit added 214,000 U.S. subscribers in the fourth quarter of 2015 — but that wasn’t enough to offset the decline in the telco’s U-verse TV business, which dropped by 240,000 subs in the period.

Still, revenue for AT&T’s video entertainment business jumped 29% sequentially, to $9.25 billion. The company ended 2015 with 25.4 million total TV customers, comprising 19.78 million for DirecTV and 5.61 million for U-verse. It was the first full quarter AT&T included DirecTV in its results; the telco completed the DirecTV deal in July 2015.

“Our DirecTV integration is going well, and the customer response to our new integrated mobile and entertainment offers is strong,” AT&T chief Randall Stephenson said in announcing the results. He cited the company’s launch earlier this month of an unlimited data option for wireless customers with either DirecTV or U-verse video, and added that the company in 2016 plans to launch “a variety of new video entertainment packages that give customers even more choices” with the first to debut within the next 45 days.

The telco is developing new “mobile-centric” video services in conjunction with Otter Media, AT&T’s joint venture with Chernin Group, Stephenson said. Otter Media owns multichannel network Fullscreen, which is preparing to launch a subscription-video service, he noted.

The AT&T Mobility wireless business added a net 2.8 million customers in Q4, to end the year with 128.64 million. Revenue for the segment declined 4.9% year over year, to $18.89 billion, on lower service and equipment sales; AT&T Mobility’s operating income climbed 22% to $4.38 billion.

Total revenue for the fourth quarter was $42.12 billion, slightly below Wall Street expectations of $42.72 billion. Net income for the period totaled $4.0 billion, or 65 cents per share; adjusted EPS of 63 cents was in line with analyst projections.

The company continues to expect to achieve $2.5 billion in annual cost synergies by 2018 from the DirecTV takeover, Stephenson said on the earnings call Tuesday.

AT&T’s overall monthly revenue per TV subscriber increased to $120.59, up from $102.66 in Q4 2014 (prior to the DirecTV acquisition).

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